No. New York Law allows second homeowners to choose where they want to vote – either their first or second home. It's the homeowners choice where to vote. This means that if, for example, someone has a home in New York City and a home in East Hampton, that person may register and vote in East Hampton even if New York City is the person's primary residence, as long as the connection with East Hampton is ongoing.

4. How does one register to vote in November?

To vote in East Hampton, one must be registered to vote in Suffolk County. Registration is simple.

Pick up a voter registration form at the Post Office, fill it out and mail it in before the October 10, 2013 deadline. To change your registration address from another city to East Hampton, make sure that you put your current voting address in Box 10 of the registration form, so that registration from the old address is cancelled.

5. I won't be where I am supposed to vote in November. Can I cast an absentee ballot?

Yes. Pick up a request application for an absentee ballot form at the Post Office and fill it out immediately; the deadline for submission of the application is October 29, 2013. If you are registering to vote and need an absentee ballot application, the voter registration form is one-stop shopping - as it gives you the opportunity to apply for the application in Box 14.

John Catsimatidis campaigning for the GOP nomination for Mayor
of New York City. Unexpected developments in the Democratic primary
are making people take a second look at GOP candidates. Photo: Cats site.

I was invited to breakfast meeting last week to hear from a candidate for the GOP nomination for mayor of NYC, John Catsimatidis.

There was no charge for the event. He doesn't need to raise funds. He ranks 132nd on the Forbes 400 and 458th on a global list of billionaires, with a net worth of $2 billion.

That may make him look like a piker by Bloomberg standards, but Cats doesn't need to take six-to-one matching funds from the City of New York. All NYC taxpayers should be grateful for that.

The thrust of Cats's pitch to the group of 75 people who came to hear him was that he was a self-made man who worked his way in a few years from being a grocery store clerk on 137th Street in Harlem, to running ten stores with a yearly volume of $25 million, generating income to him of $1 million. This has become the Gristedes grocery chain.

He has also made investments of approximately $1 billion in real estate, and owns interests in aviation and a Hellenic newspaper among other businesses. He has been a major player in getting the Greek Orthodox churches to work together. Anyone who knows about political fundraising in the United States respects the commitment of Greek-Americans to their candidates.

Cats describes himself as a GOP liberal–pro-business but interested in helping others, young and old. Sounds like Bloomberg. He is pro-safety and would reappoint Ray Kelly as Police Commissioner. He likes trade schools where graduates can go straight into jobs–electrical, carpentry, nursing, other health care services. He would bring in a Deputy Mayor who would recruit high-tech companies to come to New York City.

How would Cats differentiate himself from the other main GOP contender, Joe Lhota? He has the backing of former Mayor Giuliani and is more widely known as a government executive than John Catsimatidis.

Cats's response:

Joe Lhota has a bad temper.

He called Mayor Bloomberg "an idiot".

He called the Port Authority police "mall cops".

Lhota can't raise enough money to win. Cats would put his own money into the race. (Both Lhota and de Blasio will abide by spending limits to qualify for matching funds.)

L to R: Nick Sakellariadis, Harry Wilson and John Catsimatidis.

A mid-August Quinnipiac poll of likely GOP voters showed Lhota - former deputy to Mayor Giuliani and former MTA chairman - with 43 percent of likely primary voters, versus 37 percent for John Catsimatidis. The margin of error for this poll is 9.4 percentage points, which means that Lhota and Catsimatidis are in a statistical dead heat. Compared with the month before, Lhota lost 6 percentage points while John Catsimatidis increased his support by 2 percentage points. George McDonald is in third place with 9 percent.

My prediction is that Cats's potential as a candidate will be directly dependent on whether or not he does what he says he will do, i.e., hire people who are "better than me". He needs to rein in his impulses.

As an example, Cats promises to dig up all the concrete barriers (or, from a pedestrian point of view, islands). Citing the situation on 7th Avenue, he sees the battle as one between motorists and bicyclists. Sure, the Citibikes would have to be evicted from a lot of the areas where they are now protected by concrete islands. But pedestrians, especially seniors and children (for whom Cats has special concern), and parents of young children, and dog-walkers, have also become enamored of the greater ease of crossing the wide avenues with an island as a refuge on the way. The avenues are scary places to cross, especially for older people and people with disabilities. Those islands are lifesavers. Wholesale destruction of the islands would be a huge setback for NYC.

John Catsamitidis at this event and at others I have attended came across as hugely likeable. However, he needs someone to buy him a bigger-sized jacket and shirts with vertical stripes to disguise his Santa Claus figure. He should assemble a team of people with experience in different aspects of New York City government. He should announce who they are. Then he should listen hard to them before he announces with a wave of his hand what he is going to do. He had me eating out of his hand and then, like the 13th cuckoo of the cuckoo clock, he loses my confidence with a grand statement that appears to reflect his personal self-interest as CEO of a large grocery chain.

His chances of becoming mayor when Christine Quinn was the front-runner were remote. But NYC's business establishment is not going to be enthusiastic about a Bill de Blasio mayoralty and they will be looking for a Republican to support. When Cats first started campaigning, he did not convey seriousness about his candidacy - too ready with the wisecrack. He has taken a few steps towards being taken seriously, picking up a few allies. In the volatile atmosphere of the 2013 elections he just might be able to win the GOP nomination. In this crazy year, voters for the first time have to choose a successor to a 12-year mayor who looks better to many than the people who want to replace him. As the negatives of each of the candidates are ferreted out, Cats's prospects of winning in September and November have risen.

To find out more about candidates you hadn't paid any attention before, go to the Campaign Finance Board, which has an on-line Primary Election Voter Guide now available here or here.

De Blasio's spurt to a decided lead in the race for the Democratic nomination has huge implications. He is ahead in two independent polls - leading by 32% vs. 18% for Thompson in the NYTimes-Siena College poll (with Quinn #3) and by 36% in the Quinnipiac poll, which despite its name put Quinn in second place with 21%. The possibility that de Blasio could win 40% of the vote and avoid a runoff now presents itself.

De Blasio's appeal to the Democratic primary electorate has been twofold -

1. His "al Dante" (my term) campaign appeals to the minority vote (taking away from Thompson) by featuring his charming afro-topped son Dante giving him an unmistakably sincere endorsement as a father. De Blasio is now being attacked for using his son in this way. That may work - or it may be seen as a desperate move by his opponents and may backfire.

2. His fix-the-tax-mix approach appeals to the soul of the Democratic primary electorate by noting the high degree of income inequality in New York City and the fact that it has been increasing. Valid concerns, but hard to do much about at the local level. The biggest problem is that the Federal payroll tax is regressive, taxing the first dollar of payroll and cutting out at $113,700. NYC has hungry competitors to the north, west, east and south who have numerous Tax Foundation charts (both fair and unfair) to point to if NYC tries to fix income inequality on its own.

De Blasio leads the other candidates in every main category - among both men and women, both young and old, and both the optimists and pessimists about NYC. Of likely Democratic voters, the NYTimes-Siena College poll indicates that 45 percent view Quinn unfavorably (the de Blasio and Thompson figures are 17 and 16 percent), perhaps thanks to the well-financed anti-Quinn campaign.

I'm a Registered Democrat. However, I try to be objective when I am asked by friends to comment on the implications of the new NYC polls for possible political outcomes. Quinn and Thompson have been keeping the tone of the campaign fairly somber. The new polls suggest this isn't working, and with ten days to go till the election, it's hard to change the strategy. Attacking de Blasio's son for supporting his father, or vice versa (#GoWiththeFro), doesn't sound to me a good way to turn the tide. If the battleground is who can do the most for young people and black youth in particular, it seems to me de Blasio wins.

What it means for November in my view is that if the de Blasio lead in the polls continues to hold up, the GOP candidate (Catsimatidis and Lhota are the two most likely to be nominated) has a better chance now than any of them had any right to expect hitherto.To find out more about candidates you hadn't paid any attention to heretofore, go to the Campaign Finance Board, which has an on-line Primary Election Voter Guide now available here or here.

"A tiger in the House on every dollar due New York” --The Village Voice

"The best friend a credit card user ever had” --Money Magazine

“No one has been a greater (anti-trafficking) champion than Carolyn Maloney, a Democratic Congresswoman from New York." -- Nicholas D. Kristof and Sheryl WuDunn, “Half the Sky” (Knopf, 2009)

"While I am critical of Congress, kudos have to be given to Congresswoman Carolyn Maloney, Chair of the Joint Economic Committee, for her efforts..." --Joseph E. Stiglitz, "Freefall" (Norton, 2009)

First elected to Congress in 1992, Carolyn B. Maloney is recognized as a national leader with extensive accomplishments on financial services, national security, the economy, and women’s issues. She is a senior member of both the House Financial Services Committee (where she serves as Ranking Member of the Subcommittee on Capital Markets) and the House Oversight and Government Reform Committee, and the Ranking House member of the Joint Economic Committee. In the House Democratic Caucus, she serves as a Regional Whip (she served as Vice-Chair of the House Democratic Steering and Policy Committee in the 112th Congress).

Her career has been a series of firsts. Maloney is the first woman to represent New York’s 12th Congressional District; the first woman to represent New York City’s 7th Councilmanic district (where she was the first woman to give birth while in office); and was the first woman to Chair the Joint Economic Committee, a House and Senate panel that examines and addresses the nation’s most pressing economic issues. Only 18 women in history have chaired Congressional committees.

On the House Financial Services Committee, she has worked to modernize financial services laws and regulations, strengthen consumer protections, and institute more vigilant oversight of the safety and soundness of our nation’s banking industry. In the 113th Congress, she was selected by her Committee colleagues to be Ranking Member on the Subcommittee on Capital Markets and Government Sponsored Enterprises. She continues her membership on the Subcommittee on Financial Institutions and Consumer Credit (which she chaired in the 109th and 110th Congresses, and where she served as Ranking Member in the 112th Congress), and joins the Subcommittee on Oversight and Investigations.

She served on the historic conference committee for the Dodd-Frank financial reforms, which also created the Consumer Financial Protection Bureau. Her Credit Cardholders’ Bill of Rights (the Credit CARD Act) was signed into law by President Obama in Spring of 2009. As a senior member of the House Oversight and Government Reform Committee, Maloney legislation has helped government work more efficiently and has saved hundreds of millions in taxpayer dollars.

As co-founder of the House 9/11 Commission Caucus, Maloney helped author and pass legislation which created the 9/11 Commission and, later, to implement all of the 9/11 Commission’s recommendations for improving intelligence gathering—described as the most influential intelligence bill in decades. The James Zadroga 9/11 Health Care and Compensation Act, her bill to provide health care and compensation for 9/11 first responders, residents and workers near Ground Zero passed Congress in late 2010 was signed into law by President Obama January 2, 2011.

As a champion for domestic and international women’s issues, Maloney helped pass legislation that targets the ‘demand’ side of sex trafficking; provides annual mammograms for women on Medicare; the Debbie Smith Act which increases funding for law enforcement to process DNA rape kits, termed ‘the most important anti-rape legislation in history.’ Her legislation to create Women’s Health Offices in five Federal agencies was part of the landmark health care reform legislation signed by President Obama.

New York City has no stronger advocate in Congress than Maloney. She has delivered over $7 billion in federal aid to New York City just in the last ten years, including hundreds of millions of dollars each for two of the largest transit construction projects in the nation, the Second Avenue Subway and East Side Access project, both of which run through her district, and have helped create thousands of jobs in New York. Most recently, over $300 million in federal grants were directed to high speed rail improvement projects in the Sunnyside Rail Yards in Queens, which will help remove a bottleneck toward high speed rail in the Northeast Corridor.

Many Maloney bills have been signed at ceremonies in the White House, where all the principal legislators involved in the legislation witness the President signing their bill into law.

Her visit is hosted by Rep. Tim Bishop (NY-1). Bishop is a major target of GOP strategists, but in the last two elections, he has twice fended off a candidate of the Long Island Tea Party.

For more information about the September 7 brunch fundraiser for Rep. Maloney, contact Rep. Bishop's office at mbishop@bishopforcongress.com or me at john@cityeconomist.com.

Tax exemptions reduce the amount of tax revenue that governments get from income, sales or property taxes. They are called "tax expenditures". Legislators love 'em, because:

They are hidden from view.

They benefit a favored group of companies or individuals who are thereby indebted to the legislators...

U.S. Government tax expenditures have doubled in 15 years–from about $600 billion during the early Clinton years to $1.2 trillion in the Obama Administration. The consequence is that the lost revenues must be offset in one of three ways: (1) more tax revenues must be raised by adding new taxes or raising tax rates on existing taxes; OR(2) expenses must be cut; OR (3) the government must make up the difference by incurring a deficit and borrowing to cover it.

Don't blame Obama for this. They have been flat during his administration. Tax expenditures started rising at the end of the Clinton administration and soared after 2000 at the beginning and end of the George W. Bush administration.

That's the long story short. For details, go to A Brief History of Tax Expenditures published by the Tax Foundation, which is an organization that grieves for public tax burdens and seek to inform the public about why they should take it personally. There is a podcast available here. To subscribe via RSS, click here.

Monday, August 19, 2013

The following was sent to me via email by my friend Yale Alumnus Robert Trentlyon, who gave me permission a few weeks ago to post any of his missives that appear intended for public dissemination. I post without editing, other than a minor tweak to the headline.

THIRTY-YEAR MORTGAGES IN FLOOD ZONES?

August 19, 2013

The real estate business has
survived for years on 30 year mortgages.
Will the banks continue to issue 30 year mortgages if a building is in
the flood zone? In the past a bank could
lend money with the assurance that the building would be there for 30 years,
and if the owner did not pay his monthly interest, the bank could foreclose. But what if the building is washed away or
under water, then what recourse has the bank?

This is no longer a hypothetical
question. That is why NYC government
should not encourage building in the flood zones of NYC. Locating new
construction in a flood plain will just increase the problems NYC has for
trying to rescue people whose lives and property are threatened by the next
hurricane. Present plans are dependent
on a government bailout when hurricanes or high water do damage to buildings.

The developers are willing to take the
risk of flooding, because there is actually no risk to them. Developers never use any of their own money
in developing a new project. The
developer borrows the money and sells the residence to an eager buyer who either
pays cash or takes out a long term mortgage.
There is no question new condo owners want a river or ocean view.

More than 50% of the land of NYC is safe from
flooding. It is there that new buildings
should be located. City government should insist that developers build on
higher ground and the Mayor’s grandiose plans that are at sea level should be scrapped
or built where damage or destruction from flooding is unlikely to happen.

The
present proposed patchwork plan of defenses will not be sufficient to prevent
flooding from the rising ocean or from storm surges. There must be a proven
plan that can be used to create barriers high enough and strong enough to keep
out the ocean and that can be built higher as the sea level rises. Even such barriers may only give us another
hundred years.

August 19, 2013–The Tax Foundation prepares maps every Monday. They are neatly drawn.

These maps seem focused on the single theme that taxes in America are just too darn high.

Today the Monday map shows the net "Personal Incomes" (Taxable Incomes - Adjusted Gross Incomes) of migrants moving from some states to other states between 2000 and 2010.

The Tax Foundation press release says that the Foundation used its State Migration Calculator to calculate the net migration of taxpayers to and from each state. These taxpayer numbers are then apparently multiplied by dollar figures from IRS data. Since the IRS does not share individual data, the data must be based on samples of returns and aggregated state data.

This exercise concludes that NY, CA, IL, NJ are the biggest losers of the personal incomes of people migrating from their borders. Similarly, FL, AZ and TX are the biggest winners. High-tax states are losing to low-tax states. Case closed?

But wait. The ranks are based on dollars, not percentages of gross personal incomes:

The big states are bound to be the big winners and losers in this game. It would be much more meaningful if percentages were used. Maybe some future Monday map?

As people get older, they tend to retire to the south where physical survival is less arduous. The shift from rust belt to sun belt could be retirement driven, not tax-driven.

The Map excludes foreign migration. That could make a big difference to the numbers for some states at the top and bottom of the list. (Quite likely the data are hard to obtain and interpret.)

Whatever their motivation, the Tax Foundation comes up with data worth pondering.

Sunday, August 18, 2013

Two of my closest relatives smoked and died young. The other lived ten years longer:

My Dad did not smoke cigarettes, but he did smoke cigars and a pipe. He suffered from dizziness in his last decade of life, had a stroke and died in his 80s.

His brother died of emphysema that he attributed entirely to the cigarette smoking that he started in the Navy in WWII. He quit at 60 years of age but it was too late. He suffered decades of wheezing and also died in his 80s.

My nonsmoking mother died at 98.

A sample of just three people in one family - but the family fits the statistics.

So when the FDA prohibited candy cigarettes, effective in 2010, I applauded. Let's stop allowing kids to be addicted in stages with cig sweets and then sweet cigs. But the vendors apparently just had to remove the red tip on the candy cigarettes and rename them "candy sticks".

I went to a site on Amazon that still advertised candy cigarettes in 2011 and gave the product a one-star review, calling it a diabolical product because it encourages kids to start smoking. As of today there were 26 posts, mostly complaining that I was a self-appointed candy-cig vigilante. Only three of 101 readers found my review helpful - thanks, you three. But the product did get 17 other one-star reviews for poor quality.

Now, today, we find from Sabrina Tavernise of the New York Times that marketers determined to addict as many kids as possible to tobacco are finding another avenue for creating new (short-) lifetime customers - candy-flavored cigars. So much for all the protests under my Amazon review that the candy cigarettes were just for "nostalgia" or even "an alternative to smoking"! Yeah, sure.

Why should anyone care who gets addicted to cigarettes or cigars? Isn't it good for the economy? Well, doctors and researchers tell me that smoking is about the worst thing one can do to destroy one's health. It reduces the length of one's working life, and the health-care costs of lung cancer etc. are huge. The greatest threat to the balancing of the Federal Budget, the greatest cause of the financial difficulties of many U.S. manufacturing companies, is the cost of health care.

Cigarette addiction has multiple victims – the people who smoke and destroy their health, the families that must cope with the problems of having a sick person in the house, and the corporations and taxpayers who have to pay for the long years of health care before nature sends her Final Signal of her disapproval of the smoking habit.

For many who are addicted it may be too much to give up cigarettes or cigars. But to anyone who complains about the candy-cig police and is happy to see another generation hooked on tobacco, the only words that come to my mind are "invincible ignorance".

The light-colored low-tobacco-tax states like South Carolina (surprise!), with 0.2 percent of its revenues from tobacco taxes, are the ones with low taxes. The highest-taxed tobacco is in New Hampshire, ranked #50 (puzzle: if DC is included with a rank as a state, how do they only come up with 50 states?), with 4.4 percent of their revenue coming from tobacco. This state is all in black. The second-last state, Delaware, is only shown with a dark shade.

Am I wrong to see an anti-tax bias at work in the shading and ranking of the states? In fact, the Tax Foundation may be nonpartisan but its work is focused on expressing indignation at high taxes. In this case we have two questions to ask:

1. Consistency. One reason tobacco taxes bulk higher in New Hampshire than in other states is that NH has low overall taxes. If overall taxes are low, then New Hampshire's percentage of revenue from tobacco will be higher than another state where tobacco is taxed at the same rate relative to a carton of cigarettes. NH is being penalized for what the Tax Foundation espouses - a low-tax environment.

2. Pigou Tax. Economists disagree about lots, but no one I know doesn't like (in theory) Pigou taxes. Pigou argued for taxing "bads" rather than "goods". Don't tax labor, he said, but tax bad things, negative externalities such as pollution, smoking, city congestion. That way, we reduce the production of these bad things and create revenues for their remediation. New York City has high cig taxes, not to mention smoking bans (which are like super-high taxes), and smoking has dropped.

Now if you like Pigou taxes, you would reverse the ranking and the shading. New Hampshire becomes #1 and has the lightest color. South Carolina has the darkest color and is ranked (I suggest) #51. Something like that may be found here: http://www.stateoftobaccocontrol.org/state-grades/.